This is a direct consequence of the infamous Microsoft case. Contractors used to be treated much better, similar to employees. Then some Microsoft contractors sued for shares worth a considerable amount. Their argument was that they were "treated like employees", and therefore deserve the same things as employees. They won the lawsuit.

Now contractors have to be treated much worse because there is precedent for legal consequences if you treat them as well as your employees. It's just business, it's certainly not good for morale or productivity to create a class divide, but not creating that divide incurs serious liabilities.